new year smallAre you one of the million of people who, every year, pull their hair out trying to think of an inspiring New Years Resolution? If so, you will love these 3 quick tips which may answer your question “how do I manage my money?” The following tips will give you an idea of some personal finance resolutions, that if taken seriously, will give you a jump start ensuring you celebrate the beginning of 2010 wealthier than you began the year.

My Financial Snapshot – The most powerful resolution you will keep in your financial journey is the same as the first step you’ll take on that cross-country road trip. Answering “how do I manage my money?” begins with assessing where you currently are financially. This is accomplished by working out your cash flow. Comparing money coming in against money going out will determine your disposable income or your cash flow. This is what you will have left over every month to allocate towards those important financial goals.

My Budget – The next step in answering the all-important question “how do I manage my money?” is to develop a comprehensive budget. The simple definition of a budget is to determine where you will allocate money. If you aren’t happy with your cash flow, your budget will help you reduce spending in certain areas and thus increase your disposable income. An example would be someone spending $200 a month on entertainment then deciding in the budget that in the future they will limit entertainment spending to $150. So long as the income hasn’t changed, and their other expenses are the same, this person’s cash flow has increased by $50. The power of this budget is an extra $50 every month that can be put towards a debt reduction plan, or invested for the future.



Increase my income – As important as decreasing expenses with a budget is learning ways to increase you income. Using the same example above, let’s assume that you didn’t want to decrease any expenses but still wanted to increase your cash flow. Well the only way you’ll be able to manage my money in this situation is to earn a larger salary or increase the number of income streams you have. You may need to get a part time job, start a business or work overtime. Either way you do it, increasing your income can only improve your situation.

Finally, when you’re learning how to manage my money, these quick tips will help. Once you’ve figured out where your cash flow is,reduced your expenses try increasing your income. When your cash flow is sufficient, you can really start throwing money into your emergency fund and retirement accounts.

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